Inflation reaches 37-year high in Spain, millions lost in savings, wages

Euro slumps on gas shortage fears, US dollar firms amid global recession concerns. LiliGraphie/Shutterstock.com

Inflation in Spain has peaked at its highest level since 1985, triggering the loss of €110,000 million in wages and savings over the last 12 months alone.

The 37-year high in inflation reached in June has seen the Consumer Price Index (CPI) in Spain climb to 10.2 per cent for fuel and food.

This is a 1.5 per cent increase compared to the CPI in May, and is 0.4 points more than the previous post-1985 high set in March.

Figures released by the National Statistics Institute also indicate that core inflation – which does not take into account gasoline, food and other volatile products – has also risen by 0.6 per cent in June, pushing it to its highest level since 1993.

For consumers this means that prices in the supermarket and petrol stations, along with energy bills, are likely to continue their steady increase that began in the summer of 2021.

Overall, purchasing power has severely lowered, with approximately €110,000 million being lost as salaries and deposits no longer have the same value as they did prior to inflation levels beginning to rise.

This is because prices have grown, and continue to increase, while the figures people see in their bank accounts and their payslips have either grown far slower than the rate of inflation, or have remained the same as they were before the rapid inflation bump.

People collecting pensions do have some rest bite, however, thanks to Spanish law guaranteeing an increase in the cost of the pension payroll.

This law helps to protect pensioners from losing purchasing power despite the continued increase in prices.

Spain’s CPI has increased by 6.5 per cent between July 2021 and June 2022.

The news comes amidst the Spanish government sharing fears there may not be enough gas supply next winter.


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Written by

Tom Hurley

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